That was the whole game they played though, by design -- 3P sellers were partially meant as a prospecting tool for long tail product coverage in the marketplace, and when they found a product good enough now Amazon dips their toes in the pool and competes with them.

Some of the unfairness lies in that with the same-ish offerings, Amazon's search will favor the Amazon offerings - FBA instead of 3P shipping, Amazon.com as seller vs third party when the price/shipping is same, etc., but otherwise I think a lot of other things people complain about (cloning products and approaching manufacturers to cut off middlemen) are reasonably OK features meant to benefit customers. As a manufacturer and 3P vendor I kinda made my peace with Amazon on that I guess...